The IRS has released the FY 2000 data for individual income tax returns. The numbers illustrate a truth that will startle you: that half of Americans with the highest incomes pays 96.09% of all income tax. This nukes the liberal lie that the rich don't pay taxes. The top 1%, who earn 20.81% of all income covered under the income tax, are paying 37.42% of the federal tax bite.

Think of it this way: less than four dollars out of every $100 paid in income taxes in the United States is paid by someone in the bottom 50% of wage earners. Are the top half millionaires? Noooo, more like "thousandaires." The top 50% were those individuals or couples filing jointly who earned $26,000 and up in 1999. (The top 1% earned $293,000-plus.) Americans who want to are continuing to improve their lives - and those who don't want to, aren't. Here are the wage earners in each category and the percentages they pay:

Top 5% - 56.47% of all income taxes; Top 10% - 67.33% of all income taxes; Top 25% - 84.01% of all income taxes. Top 50% - 96.09% of all income taxes. The bottom 50%? They pay a paltry 3.91% of all income taxes. The top 1% is paying more than ten times the federal income taxes than the bottom 1%! And who earns what? The top 1% earns 20.81% of all income. The top 5% earns 35.30% of the pie. The top 10% earns 46.01%; the top 25% earns 67.15%, and the top 50% earns 87.01% of all the income.

The Rich Earned Their Dough, They Didn't Inherit It (Except Ted Kennedy)

The bottom 50% is paying a tiny bit of the taxes, so you can't give them much of a tax cut by definition. Yet these are the people to whom the Democrats claim to want to give tax cuts. Remember this the next time you hear the "tax cuts for the rich" business. Understand that the so-called rich are about the only ones paying taxes anymore.

I had a conversation with a woman who identified herself as Misty on Wednesday. She claimed to be an accountant, yet she seemed unaware of the Alternative Minimum Tax, which now ensures that everyone pays some taxes. AP reports that the AMT, "designed in 1969 to ensure 155 wealthy people paid some tax," will hit "about 2.6 million of us this year and 36 million by 2010." That's because the tax isn't indexed for inflation! If your salary today would've made you mega-rich in '69, that's how you're taxed.

Misty tried the old line that all wealth is inherited. Not true. John Weicher, as a senior fellow at the Hudson Institute and a visiting scholar at the Federal Reserve Bank, wrote in his February 13, 1997 Washington Post Op-Ed, "Most of the rich have earned their wealth... Looking at the Fortune 400, quite a few even of the very richest people came from a standing start, while others inherited a small business and turned it into a giant corporation." What's happening here is not that "the rich are getting richer and the poor are getting poorer." The numbers prove it.

I have made an executive decision as the owner and ultimate editor of this website that this table and these numbers stay on this website forever - or until next year's numbers come out. In order to get these facts, you have to see them each and every day. This story, along with a link to the IRS chart, will stay somewhere on the RushLimbaugh.com homepage so everyone can see and find these numbers at any time. It's crucial that people get this, so please, share it with a friend now!

Of the bottom 50%, what is the average wage and what would be left after paying for bare essentials that the welfare system would otherwise provide, such a like food, medical, shelter, transportation and utilities. A more meaningful comparison might be disposable personal income, after covering the essentials that government would otherwise get socked with.

Total income defined as all family cash (aftertax) income + proportion of total federal taxes extracted from that income class through immediate taxation and indirect routes such as consumption expenditure or lower wage etc. Income include entitlement payment, benefits etc.

A household consists of the people who share a housing unit, regardless of the relationships among them.

Comprehensive household income equals pretax cash income plus income from other sources. Pretax cash income is the sum of wages, salaries, self-employment income, rents, taxable and nontaxable interest, dividends, realized capital gains, cash transfer payments, and retirement benefits plus taxes paid by businesses (corporate income taxes and the employer's share of Social Security, Medicare, and federal unemployment insurance payroll taxes) and employee contributions to 401(k) retirement plans. Other sources of income include all in-kind benefits (Medicare, Medicaid, employer-paid health insurance premiums, food stamps, school lunches and breakfasts, housing assistance, and energy assistance). Households with negative income are excluded from the lowest income category but are included in totals.

Individual income taxes are distributed directly to households paying those taxes. Payroll taxes are distributed to households paying those taxes directly or paying them indirectly through their employers. Federal excise taxes are distributed to households according to their consumption of the taxed good or service. Corporate income taxes are distributed to households according to their share of capital income.

a. Income categories are defined by ranking all people by their comprehensive household income adjusted for household size--that is, divided by the square root of the household's size. Quintiles, or fifths, of the income distribution contain equal numbers of people.

It appears from your link that the bottom 50% actually are taxed at a higher rate than the top 1% of earners. So, yes, the bottom 50% do pay less in an aggregate, but they are paying more of their income in taxes than the rich. This whole argument has always been disingenous and dishonest, IMHO.

I am certainly in favor of lower taxes. However, there are two problems with this analysis:

1) Fica hasn't been included

2) It's based on reported income. Sure, the people that have the highest Adjusted Gross Income are going to pay the most taxes. But if you have someone who made $1 million, has $600,000 in deductions, he'll be listed as having $400,000 in income, not $1 million. So the entire calculation is faulty.

People who have big incomes pay big taxes. People who have little incomes pay little taxes

That's to be expected but it would be much better if it were exactly proportionate. That is, everyone should pay the same proportion of their income in taxes. One who makes $1000 should pay 10% or $10. One who makes $100,000 should pay 10,000 or 10%. That's the only fair way to do it and the only way to ensure that selective tax cuts aren't used to buy votes.

I am certainly in favor of lower taxes. However, there are two problems with this analysis:

1) Fica hasn't been included

I don't think it should either unless you are also going to include future benefits as well. This is, or should be separate from the general operating fund of the government, despite the present practice of "borrowing" from SS funds. As well, there is a cutoff as to how much FICA one pays precisely due to there being a limit as to how much one can collect. So, to compare someone over the cutoff to someone below the cutoff is not valid. If SS retirement collections were unlimited, then a comparison could be made. Remember the purpose of Social Security - Supplemental income.

2) It's based on reported income. Sure, the people that have the highest Adjusted Gross Income are going to pay the most taxes. But if you have someone who made $1 million, has $600,000 in deductions, he'll be listed as having $400,000 in income, not $1 million. So the entire calculation is faulty.

This might be true except for a couple of things; first, I doubt if there are enough deductions avialable, year after year, to reduce a $1 million income to $400,000. If you're talking business expenses, well then that's another story. But, remember that business taxes are generally passed on to the consumer anyways. And business expenses are a necessity.

The other issue is the AMT (which has never been adjusted for inflation BTW). There are plenty of people with much smaller incomes that have been hit by this little beauty.

Frankly, I'm with you on one thing here; there ought not be any deductions. Taxes are not the proper method to steer people's activity. I also think a flat tax is the best, most fair way to collect the funds necessary to run the government. And I think that Social Security ought to be voluntary, not mandatory.

Frankly, I'm with you on one thing here; there ought not be any deductions. Taxes are not the proper method to steer people's activity. I also think a flat tax is the best, most fair way to collect the funds necessary to run the government. And I think that Social Security ought to be voluntary, not mandatory.

Let's just start by saying everyone has to eat and there's a certain minimum cost involved. Read that metaphorically.

Also consider that the vast majority of low-wage earners are high school and college kids living at home with Mom and Dad. Precious few are in financial straits. And I'll further say that most of those that are got that way by their own ambitions, or lack thereof. Like they may have beleived the likes of Jesse when he told them that the world owes them a living. Or something like that...

Yes, there are some hard cases, and most people hit hard times at some point in life, but you are taking a very small percentage of the population and making a broad generalization from it.

When the percentage increases because you work hard, now we have a problem. Will my vote be increased by the same percentage?

That is precisely the problem with the "progressive" tax rates (or should I say regressive since they punish the productive). The democRATS basically buy votes by taking money from one class of taxpayer and giving it to other folks who tend to vote for them. Its buying votes on a grand scale. Not that silly low-budget stuff that they do in Wisconsin.

The bottom 50% pays 4% of the taxes while earning the 13% of the income.

The top 50% pays 96% of the taxes on only 87% of the income.

Where's common sense?

Wake up, the distribution tax payment is skewed totally in favor of the poor, Because they control a greater proportionate vote.

To remove taxation of the individual, is to remove the goad which assures accountability of government to the electorate. Federal tax rates are high because a majority of the electorate do not share proportionately in the burden their demand for largesse imposes on the minority of citizens.

The siren call for representation without taxation is the formula that got us where we are at today. The ability to hide or disguise taxation from the view of large sectors of the electorate allows the Congress to get away with the creation of the evergrowing monster that it fosters.

A government which robs Peter to pay Paul can always depend on the support of Paul. -George Bernard Shaw

Liberty and freedom have a price, responsibility. If that price is avoided there are no brakes on the growth of government, the ultimate result is the end of freedom through creeping socialism.

Right now the bottom 60% perceive little to no "Individual Income Tax" burden,(in many cases even a handout) and 70% of the voting publicclamors for more from government looking for the top 40% of income earners/producers to foot the bill.

That disproportionate scale is pandered to by the liberal establishment while keeping the poor just as they are through subsidies discouraging upward economic mobility.

"The income tax in effect makes us vassals to the government  the politicians decide how much income we can keep. No mere reform of this slave tax, such as flattening the rate, can correct its fundamental denial of control over our own money. Only the abolition of the income tax itself will restore the basic American principle that our income is both our own money and our own private business - not the government's."

The intent of the structure of the individual income tax is for political and social mainpulation not revenue collection. The Individual Income tax is maintained to establish and hold every person in the country in perpetual legal jeopardy and to create artificial divisions among the electorate (rich vs. poor; big business vs. the little guy; etc).

Considering those factors, it is always good to remember the philosophical roots of the left which can be found here: Manifesto of the Communist Party, by Karl Marx and Frederick Engels, published in 1848. Among their recommendations are these:

The proletariat will use its political supremacy to wrest, by degree, all capital from the bourgeoisie, to centralize all instruments of production in the hands of the state ... . Of course, in the beginning, this cannot be effected except by means of despotic inroads on the rights of property ... . These measures will, of course, be different in different countries. Nevertheless, in most advanced countries, the following will be pretty generally applicable.

1. Abolition of property in land and application of all rents of land to public purposes. 2. A heavy progressive or graduated income tax. 3. Abolition of all rights of inheritance.

That is a situation that must end with the repeal of the income tax from the statutes, and the prohibition of its use by Constitutional amendment that future generations will not face the same manner of manipulation and interference in their lives.

Seriously, you been to McDonalds lately? Or the local mall? Who's working there? Are they the primary earner? Most likely not. I don't know about where you live but our malls and Micky-D's are staffed primarily by HS and College aged workers with the occasional second-income spouse.

Let's just start by saying everyone has to eat and there's a certain minimum cost involved. Read that metaphorically.

As a matter of fact there is a simple answer that assures proportionate participation and exposure to the nation's tax bill while making certain that no one is taxed for that fundmental minimum cost involved.

A fixed rate, National Retail Sales Tax (NRST) containing a prorated payment to everyone based on their household size.

Protecting the Poor from the Tax

A common assumption about the NRST is that it is naturally regressive, since lower income individuals spend a greater percentage of their income in any given year on consumption of necessities. Because a sales tax is an altogether different paradigm of taxation, any judgment on the equity of the tax must be accompanied by a different analysis of regressivity.

To examine how a national retail sales tax could address such concerns, a number of issues should be broached. First and foremost, taxing income at a graduated rate is not the only means of making a tax system progressive. Moreover, a tax on income, no matter how steeply graduated, does not necessarily make an income tax progressive. Even if progressivity is measured by the common standard of "ability to pay," the income tax is imposed only on productive labor and the return to capital and not on wealth. An income tax does not tax consumption of older accumulated capital, whereas a sales tax does.

Equally important, using taxable income as the basis to determine progressivity is necessarily based on a year-to-year analysis where the ability to pay is measured as a function of income per unit of time. Consumption over the life of a taxpayer is in many respects a better measurement of the ability to pay taxes. Because people's incomes fluctuate throughout their lives, the lifetime application of a sales tax is much less regressive than it would appear to be when examining a cross-section of taxpayers in any given year. Since all income is earned for the purpose of eventual consumption, under a national retail sales tax, the taxpayer can defer taxation by saving his income. But he cannot forever avoid the tax.

In any case, an NRST plan can be made progressive through a rebate mechanism that would shelter low-income people from paying the tax. One manner in which the NRST could be made less regressive would be to exempt certain necessities--such as food and clothing--from the tax. That approach would exempt, however, the most expensive food (lobster and caviar) and the most expensive clothing ($1,000 designer suits). It is a very inefficient means of providing tax relief to lower and middle income Americans and would necessitate a much higher overall rate. A more neutral and less distortive approach is to simply provide each family a level of consumption free of tax by providing a rebate of the tax on expenditures up to the poverty level.

The rebate could work as follows: A family consumption refund would be established for each household at an amount equal to the sales tax rate times the poverty level. The poverty level is defined by the Department of Health and Human Services guidelines and should be raised by the sales tax rate.

The family consumption allowance approach has several effects. First, it makes the sales tax applicable only to consumption beyond the necessities of life. Second, it makes the tax in effect progressive, not only because it is based on consumption, a better index of true ability to pay, but because--if one wants to continue to view progressivity through an income tax lens--it entirely exempts lower income workers. Third, unlike most state taxes, it does not undertake the complex and politicized task of determining what to tax and what to exempt, thereby minimizing administrative and compliance questions and economic distortions.

The 23 percent NRST plan would have a highly beneficial impact on the U.S. economy and raise the standard of living of the American public. The tax compliance costs borne by our economy would fall sharply. And the degree of intrusiveness of the tax system in our lives would decline greatly. Once set free from the burdens of compliance with the current system and the punitive tax rates imposed on work, savings, and investment, the United States will become a more productive and more prosperous republic. A national retail sales tax is more compatible with the principles of a free society than any other alternative tax system.

HAIL to the Chief - he is sadly missed. I always enjoyed his NRST threads. That tax scheme makes sense, though I lean towards a flat income tax myself. I could live with either one. Heck, I'm living with this risky "regressive" tax scheme now as it is, and I'm surviving.

HAIL to the Chief - he is sadly missed. I always enjoyed his NRST threads.

CHIEF may have passed on, but the NRST is still very much alive and will continue to be supported by those committed to a fairer and more constitutional system of taxation.

The current bills before Congress, though the numbers may change with re-introduction in the next session, ping on your congressional candidates people elections count:

Billy Tauzin offers one solution, a 15% retail sales tax that replaces all income taxes but doesn't touch SS/Mediscare payroll taxes, that comes close to meeting the essentials of what it takes to reverse trend?:

H.R.2717 Sponsor: Rep Tauzin, W. J. (Billy)(introduced 8/2/2001) Title: To promote freedom, fairness, and economic opportunity for families by repealing the income tax, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.

John Linder (R Texas) offers a more comprehensive bill to kill all income and payroll taxes outright, and provide a revenue neutral replacement:

H.R.2714 Sponsor: Rep Largent, Steve(introduced 8/2/2001) Title: To terminate the Internal Revenue Code of 1986. A bill to prohibit he imposition of any tax by the Internal Revenue Code: (1) for any taxable year beginning after December 31, 2005.

To sunset some agencies we don't need and rein in their expenditures:

H.R.2373 Sponsor: Rep Brady, Kevin(introduced 6/28/2001) Title: To provide for the periodic review of the efficiency and public need for Federal agencies, to establish a Commission for the purpose of reviewing the efficiency and public need of such agencies, and to provide for the abolishment of agencies for which a public need does not exist.

Modification then enact and ratify:

H.J.RES.45 Sponsor: (introduced 4/25/2001) Latest Major Action: 5/9/2001 Referred to House subcommitte. Title: Proposing an amendment to the Constitution of the United States relative to abolishing personal income, estate, and gift taxes and prohibiting the Untied States Government from engaging in the business in competition with its citizens.

(Modified to prohibit all income, payroll, gift estate taxes as HR2525 calls for, or we will see European VAT style hidden taxes along with payroll excises to take over in the place of the of the current individual income tax(i.e. personal income tax) that Ron Paul amendment prohibits.)

And to keep em reminded that there is indeed a Constitution to pay attention to:

H.R.175 Sponsor: (introduced 1/3/2001) Latest Major Action: 2/12/2001 Referred to House subcommittee Title: To require Congress to specify the source of authority under the United States Constitution for the enactment of laws, and for other purposes.

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